A little procrastination never hurt anyone, right? Wrong, if you are talking about putting off saving for retirement. The cost of procrastination can end up as the difference between a comfortable retirement and one in which you struggle to make ends meet. The economic climate is not what it used it be, and with the political landscape dramatically changing, there is uncertainty in how health care will be provided, how individuals and businesses will be taxed, and if Social Security will even exist in the future. All could drastically affect how we plan for retirement.
You should not let the economic downturn deter you from investing for your future. The old adage of “buy low, sell high” is relevant now more than ever – with the current market environment, combined with the decline in market valuations, investing now provides a tremendous opportunity for long–term growth.
The same is true for business owners considering setting up retirement benefits plans for their employees. Providing an opportunity for your employees to conveniently invest now for their retirement can be a huge benefit for them later on. In addition, there are many benefits to you as a business owner for setting up a retirement plan for you and your employees. – You may help secure your own retirement funds. – There may be tax benefits for the business upon implementing a plan. – You gain a valuable incentive to encourage employee tenure, thus reducing costly turnover and its associated loss of productivity.
If you are like many small business owners who feel that starting up a retirement benefits plan is the right thing to do, there are several things to consider before you decide on a specific plan. There are many options available; however, determining which are most appropriate for your business is often based upon: – The number of employees in your company. – The age and income brackets of your employees. – Whether you plan to match all or part of your employees’ contributions. – The cost to administer the retirement plan and for certain investment choices.
A variety of investment options are available within all of these plans, and some have company size limits and/or mandatory employer contributions that can be a factor in determining which best fits your needs. For example, in a SEP IRA or a Uni(k) plan, you are required to contribute for each of your employees, the same amount you contributed for yourself. If you have more than a handful of employees, these may not be your optimal choice.
Setting up a retirement benefits plan seems overwhelming; however, you don’t have to do this alone. Once you decide your company can benefit from a retirement plan, you should partner with a qualified investment advisor to create your plan. Your advisor should take the time to analyze your company and discuss your strategic objectives in order to design a plan that fits your criteria. You should also look for an objective advisor that offers a variety of non–proprietary investment products to ensure you get the right mix of investment vehicles, regardless of the provider.
Your advisor should also perform annual reviews of your plan to ensure it continues to meet your strategic objectives as your business grows and changes. Businesses rarely remain static, and an experienced advisor can be invaluable in assuring your plan continues to meet the needs of you and your employees over time.
The bottom line is that it is never too early to plan for your future. And, for business owners, working with a qualified investment professional to help your employees plan for theirs can be beneficial for both your company and for them.